Vietnam starts work on $9 bln refinery

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     Prime Minister Nguyen Tan Dung and other former government officials gave orders to start construction on the Nghi Son refinery on October 23. Photo by Anh Vu 

Construction on Vietnam's second refinery started Wednesday as the country plans to increase its petroleum output to meet growing energy demand.

The Nghi Son refinery, which will cost a total of around US$9 billion to build, will have a refining capacity of 200,000 barrels per day, or 10 million tons per year, once it comes online in 2017.

As a team, the new plant and the existing Dung Quat refinery are expected to satisfy 65 percent of the nation's oil and gas needs by 2020. Dung Quat, Vietnam's first refinery, opened in the central province of Quang Ngai in 2009.

Located in Thanh Hoa Province, about 200 kilometers south of Hanoi, the Nghi Son refinery will import oil from Kuwait to process it into liquefied petroleum gas (LPG), gasoline, diesel fuel, jet fuel, polypropylene, paraxylene, benzene and sulphur.

Speaking at the groundbreaking ceremony, Prime Minister Nguyen Tan Dung appreciated the efforts of PetroVietnam and foreign partners for arranging capital and completing investment procedures to enable the groundbreaking.

Dung required relevant ministries and agencies to support the investor, Nghi Son Refinery and Petrochemical Company, to implement the project.

The refinery is a joint venture between Petro Vietnam, Kuwait Petroleum International, Japan's Idemitsu Kosan and Mitsui Chemicals.

A consortium led by Japan's JGC Corp., Chiyoda Corp., GS Engineering & Construction Corp., SK Engineering & Construction Co., Technip France, and Malaysia's Technip Geoproduction are the contractors.

Vietnam has forecast that the demand for petroleum products would reach 27 million tons per year by 2025.

As part of efforts to meet the country's growing energy needs, Dung Quat aims to increase its output to 10 million tons per year by 2015 from its current output of 6.5 million tons.

PetroVietnam is also preparing to build the 10-million-ton-per-year Long Son refinery in southern Ba Ria-Vung Tau province, slated for completion in 2018.

Meanwhile, the UK's Technostar Management and Russia's Telloil are planning to build the Vung Ro refinery with a refining capacity of eight million tons per year in the south-central province of Phu Yen.

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